Self-Directed IRA vs Conventional IRA

All IRA Plans are not Equal

At the basic level, all IRAs are the same.  The tax law outlines the tax-sheltering benefits of the plan and key factors such as contribution limits, timelines for distributions, beneficiary designations and the like.

Where IRA plans differ is in the level of control you have over your investment portfolio, and the type of investments you may engage in with the IRA.

With a truly Self-Directed IRA, an account holder can invest in anything the Internal Revenue code allows.  The list is almost endless, excluding only life insurance and collectibles.

Investments with a conventional IRA held by a bank or Wall Street brokerage company are restricted to their own products – generally stocks and other exchange traded assets or insurance annuities.

A Truly Self Directed IRA

“Self-Directed” is a broad term when applied to IRA plans, and simply means that you as the investor choose which investments to participate in.  The mainstream firms offer self-directed plans, but the investment choices are limited to the conventional financial products they provide.  With a truly self-directed IRA, you will have the option to invest in anything the IRS rules allow for, and are not limited based on what the institution offers.

With a truly self-directed IRA, you can invest in real estate, mortgage notes, private placements, cryptocurrencies, and a host of other assets as allowed by law.

A Lack of Knowledge

The biggest challenge facing retirement investors who want to “unlock” their funds and move them out of the control of the traditional financial services industry and into a Self-Directed IRA is simply a lack of knowledge.  The conventional financial services industry has focused on their business model and dominated the space for decades – to the point where most folks incorrectly assume the Wall Street way is the only legal option for an IRA.  This simply is not true and never has been.  It’s just that banks, brokerage firms, insurance companies, mutual funds companies and most financial planners have nothing to gain from informing investors about their “real” choices.

It’s Your Money!

Remember…it’s your money and you’re not constrained now that you understand how much control you actually possess. If you’re currently with a financial services provider that restricts investment options, now is the time to make a move. Although there are some important considerations and guidelines for Self-Directed IRA investing, if you treat the process with the respect it deserves, “unlocking” your retirement plan will be both exciting and rewarding. We can help you navigate the process in a timely, efficient and cost effective manner.

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